TLDR
- Cardano whale swapped 14.4M ADA for 847,695 USDA, losing over $6M due to slippage.
- The USDA price spiked above $1.25 before retracing to around $1.04 after the trade.
- The dormant wallet had no prior USDA activity since September 2020 before the swap.
- Analysts warn large trades in illiquid pools can trigger rapid price spikes and losses.
A dormant Cardano wallet lost $6 million swapping 14.4 million ADA for 847,695 USDA in an illiquid pool, causing extreme slippage on DEXs. The trade briefly pushed the USDA price above $1.25 before retracing to around $1.04. The wallet had no prior USDA activity since September 2020. Analysts warn that large trades in illiquid pools can trigger rapid price spikes and unexpected losses.
A dormant Cardano wallet executed a swap that instantly drew attention after overwhelming a small liquidity pool. The wallet swapped 14.4 million ADA, worth roughly $6.9 million, for just 847,695 USDA, a Cardano-native dollar stablecoin. On-chain investigators noted the size and rapid price movement, emphasizing how large orders can surpass available liquidity and cause severe slippage on decentralized exchanges.
Massive Loss in Illiquid USDA Swap
The wallet, inactive since September 2020, effectively paid more than $8 per USDA at execution, far above the intended $1 peg. USDA has a market cap of roughly $10.6 million, making it highly sensitive to large orders. The swap caused the token price to spike to $1.26 before settling near $1.04 once liquidity normalized.
Data from on-chain sources confirmed the abrupt price jump. Analysts noted that such losses occur when large trades pass through automated market makers with limited depth. The transaction wiped out around $6.05 million in value in minutes, demonstrating the risks associated with executing large trades in thinly funded or illiquid pools.
Dormant Wallet Awakens
The address had no prior history with USDA, raising questions about whether the user misclicked, selected the wrong ticker, or misjudged liquidity. ZachXBT, an on-chain investigator, highlighted in Telegram that the swap “created a rapid $6 million loss as the stablecoin price jumped far beyond its peg.”
The sudden activity of a wallet dormant for over five years shows that even long-inactive addresses can still trigger significant market impact. Traders noted that such moves can generate unexpected volatility in smaller markets and can affect price dynamics temporarily on low-liquidity exchanges.
Risks of Trading in Low-Liquidity Markets
Market observers emphasized that slippage checks are critical for large trades. Even a few million dollars in ADA can overwhelm decentralized liquidity if the opposing side of a pool is underfunded.
Similar cases have occurred in past cycles, with traders losing millions due to wrong tickers, zero-liquidity pools, or aggressive market orders executed through aggregators. The incident has renewed discussions on careful risk management and execution in illiquid assets on Cardano. Traders are reminded to check liquidity, pool depth, and potential slippage before placing large trades.
Market Reaction and Community Attention
The swap quickly drew attention among Cardano traders and analysts. Discussions focused on the unusual nature of a long-dormant wallet suddenly executing a whale-sized transaction. Some suggested it may have been a misclick or a misunderstanding of USDA’s liquidity, while others pointed out that even experienced traders must consider pool depth to avoid large losses.
The event highlights the dangers of executing trades in illiquid decentralized markets. Experts continue monitoring similar wallets, noting that even dormant capital can create sudden price shifts. The incident reinforces that thorough checks and careful execution remain essential when moving large sums on smaller decentralized exchanges.
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